Fri Dec 11, 2009 11:47pm IST
NEW YORK, Dec 11 (Reuters) - The number of rigs drilling for natural gas in the United States climbed nine this week to 757, according to a report on Friday by oil services firm Baker Hughes in Houston.
The U.S. natural gas drilling rig count has moved up sharply after bottoming at 665 on July 17, its lowest level since May 3, 2002, when there were 640 gas rigs operating.
But the rig count is still down sharply since peaking above 1,600 in September of last year, standing at 622 rigs, or 45 percent, below the same week in 2008.
Many gas producers have scaled back drilling operations with credit still tight and natural gas cash prices hovering near $5 per million British thermal units (mmBtu), off more than 60 percent from July 2008 highs above $13.
But while drilling has dropped sharply over the past year or so, traders noted production has not slowed much, with recent government data showing gross September gas output in the lower 48 states down 2.2 percent from August but up more than 11 percent from year-earlier levels when two Gulf of Mexico storms crippled output.
Many traders agreed more rig cuts may be necessary to balance an oversupplied market, with gas inventories at record highs and demand, particularly from the industrial sector, still down sharply due to the lackluster economy. (Reporting by Joe Silha; Editing by Marguerita Choy)
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Source: http://in.reuters.com/article/rbssEnergyNews/idINN1112564420091211
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